The U.S. Department of Justice announced on November 8, 2021 that Arthrex Inc., a Florida-based medical device company, has agreed to resolve allegations that it violated the False Claims Act by paying kickbacks that caused the submission of false claims to the Medicare program.
The federal government announced that Arthrex Inc., which specializes in orthopedic products, has agreed to pay $16 million for allegedly paying kickbacks to a Colorado-based orthopedic surgeon. The settlement resolves allegations that Arthrex agreed to provide remuneration to the surgeon in the form of royalty payments purportedly for the surgeon’s contributions to Arthrex’s SutureBridge and SpeedBridge products when the remuneration was in fact intended to induce the surgeon’s use and recommendation of Arthrex’s products. The United States contended that Arthrex’s participation in this arrangement violated the Federal Anti-Kickback statute and, in turn, the False Claims Act by causing the submission of false or fraudulent Medicare claims.
The settlement resolves claims brought in a lawsuit under the qui tam or whistleblower provisions of the False Claims Act by Joseph Shea. The lawsuit was filed in the U.S. District Court for the District of Massachusetts and is captioned United States ex rel. Shea v. Arthrex Inc. et al., No. 20-cv-10210-ADB (D. Mass.). Under the False Claims Act’s qui tam provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. Shea will receive $2.5 million of the False Claims Act settlement.
The Acting U.S. Attorney stated with regard to the settlement, “Paying bribes to physicians to distort their medical decision-making corrupts the health care system. This settlement demonstrates our dedication to ensuring that taxpayers and patients get a health care system that is on the level. Kickbacks have no place anywhere in our health care system, and we will continue to identify and punish this illegal conduct.”
The Special Agent in Charge of the Department of Health and Human Services Office of Inspector General (HHS-OIG) stated, “Medical device manufacturers who engage in such kickback schemes undermine the integrity of federal health care programs. Working closely with our law enforcement partners, our agency will continue to protect patients and taxpayers by holding accountable companies that engage in unlawful activities.”
If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publically known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.
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